A Show of Strength

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Pritha Mitra Dasgupta: Jun 21 2011, 02:29 IST

When two arch rivals shake hands, it certainly makes for news. So, when last month, Subhash Chandra's Zee Entertainment Enterprises Limited (ZEEL) and Rupert Murdoch's Star India, two of the country's biggest and most popular broadcasters, decided to merge their distribution businesses, Zee Turner and Star Den, respectively, to form a new 50:50 distribution company, Media Pro Enterprise India, it made all stakeholders—especially multi-system operators (MSOs), local cable operators and direct-to-home (DTH) players—in the broadcast industry sit up.

The rivalry of the two media conglomerates is perhaps as old as the history of satellite television in India . ZEEL, as the first satellite television broadcaster in India , and Star India, which is part of News Corp, have been fighting for the top slot in the broadcast space for the last 12 years. But while the cable and satellite television market today boasts of around 104 million households as subscribers out of the total television-owning household base of 140 million, according to the FICCI-KPMG Media and Entertainment Report of 2011, both the broadcasters have been dependent on the local cable operator to help them reach subscribers and raise subscription fee. Currently the market is highly fragmented with over 50,000 local cable operators (LCOs) controlling over 74% of the market. This results in widespread leakages, under-declaration of subscriber base, poor service mix and low ARPU (average revenue per user).

Both Star and Zee have tried to get an upper hand by setting up their own distribution companies, but it has not been of

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